Facebook memories rarely remind me as dramatically as this one what opportunities to multiply money can look like. This was a clear example of “be greedy when others are fearful” that I admit I myself (regrettably) did not take advantage of. At that time, Citigroup was priced for a very high likelihood it might go to zero, and it was far from certain that the company would 1:10 reverse split and rise six-fold, and soon restore a high and rising dividend. My excuse at the time was that I was busy planning our 2009 train trip from Turkey to Singapore, though with hindsight, if I had put what I spend on that trip into Citi stock, it would have grown to almost US$250,000!
Almost a decade earlier, I bought Philip Morris below $20, and bought Apple around $20, and sold both when they hit $50. Fundamentally, I like to buy what I consider good quality stocks when they are out of favor, and ride them back up to fair price, especially when I can get paid an attractive dividend for waiting.
The moral of this story, which I apply investing my own and client money, is to regularly look for good assets others are scared to invest in, and regularly allocate to those, while avoiding assets everyone else is bidding up the prices of.
For Citigroup, the stock reverse split 10:1, and is not paying a $0.32/quarter dividend, which would be an over 10% yield on the original investment had I bought it at the low.